A trio of Colorado Democrats is moving forward with a proposal that could establish a state-run health insurance plan by 2025.
“The goal still remains: lowering health insurance premiums and creating access to an affordable quality insurance plan,” said Rep. Dylan Roberts of Eagle County.
The idea is to set up two phases of reform, giving the private sector a chance to tackle the problem before the government gets fully involved, as CPR News previously reported.
In 2023 and 2024, health insurance providers would be asked to provide lower-cost health insurance plans across the state. Those plans would have to meet Affordable Care Act requirements while also lowering premiums. The goal would be to reduce customer costs by 20 percent in 2024 compared to 2021.
“Last year, we heard often from the health care industry that we could do this on their own, so we are holding them to their word on that,” said Sen. Kerry Donovan, another sponsor.
If that goal isn’t met, the state would create a new quasi-governmental authority that would sell health insurance plans, starting in 2025. Several other states have tried setting goals for health costs, but only one, Washington, has gone as far as creating its own “public option.”
If it were created, hospitals and doctors would be required to accept patients under the state health plan and state officials would have the power to control costs by paying lower reimbursements to health care providers. However, some providers could get higher rates if they show they need it — a change meant to protect rural and safety-net hospitals. The state-run option would be funded by premiums paid by customers and by federal money.
Health care reform has been a top priority for Gov. Jared Polis, who earlier signaled support for the effort. Last year, a similar proposal fell apart as the pandemic disrupted the legislative session.
Rep. Iman Jodeh joined as a sponsor this year. She said that high costs affect not just rural communities, but also people of color living in city centers. She recalled the pain and confusion of watching her parents struggle to pay medical bills for a pre-existing condition that she was diagnosed with as a teenager.
“I felt like a burden, and I felt like I was causing them pain because of their inability to have insurance,” Jodeh said. “In the urban corridor, BIPOC communities are disproportionately represented … when it comes to the lack of access.’
Donovan described the bill as especially important after mass unemployment left many people without their work-provided health insurance.
“COVID-19 has again highlighted that major crack in our health care system,” she said.
The bill is meant to shore up coverage for people who must buy insurance as an individual, as well as for small businesses that are trying to offer plans for employees. That’s about 15 percent of Coloradans, and Roberts estimated that about half would join the state plan if it’s created. The state option would be repealed if federal lawmakers created a national public option.
The response from the industry has been mixed.
The Colorado Association of Health Plans, which represents insurers, said that its members already had helped to reduce premium.
Executive Director Amanda Massey said in a written statement that the "proposal as introduced would risk the gains achieved in recent years to stabilize health insurance markets and leave Coloradans with fewer options for health insurance and health providers," casting it as a "highly subsidized government health plan that plays by different rules and leverages artificially low prices."
Massey argued that voters had already rejected a plan for government-affiliated health car in 2018e. About 79 percent of voters voted against a proposal to create a system known as ColoradoCare; however, that "universal" system would have been far more expansive than the current proposal and would have come with a hefty tax bill on Coloradans' income.
The Colorado Hospital Association said on Thursday that it appreciated some of the bill's design, especially the fact that the industry will have a chance to reduce costs before the government intervenes. But the cost reduction goals in the current plan "will set us up for failure," said Katherine Mulready, senior vice president for CHA, in a written statement.
"To be successful, the (cost reduction) targets must be reasonable and evidence-based, the rules determining success or failure should be clear and simple, and accountability should be fair. This draft does not meet those goals."
An industry advocacy group, Partnership for America’s Health Care Future, is spending heavily to stop the bill. It planned about $1 million of ads in Colorado, the Colorado Sun reported. The group, which is not required to disclose its donors, has argued that the state’s proposal would pose a threat to the least profitable hospitals, including those that serve rural areas and people with Medicaid benefits.
Once introduced, the bill will be assigned to a committee and must be passed by both the state House and Senate before the governor can sign it into law.